THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY

USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT

POLICY

Date:

GAIN Report Number:

Approved By:

Prepared By:

Report Highlights:

The Indonesian food processing industry will serve a population of 255 million in 2015 and offer

significant market potential for U.S. food and ingredient suppliers. In 2013, the product value of

Indonesia’s large and medium food and beverage processing industry was $70.6 billion (IDR 745

trillion). The Indonesian food processing industry produces food products catering to all levels of

consumers. Several factors contributing to the growth of the food processing industry are the

introduction of new flavors and products with variant package sizes, growing middle class, aggressive

promotional activities, growth of modern retail outlets, and growing health awareness. U.S. exporters

face competition from neighboring ASEAN countries, China, Australia, New Zealand, and Europe.

Fahwani Y. Rangkuti and

Thom Wright

Ali Abdi

Food Processing Ingredients 2014

Food Processing Ingredients

Indonesia

ID1451

12/19/2014

Required Report - public distribution

Post:

Executive Summary:

I. MARKET SUMMARY

The Indonesian food processing industry offers significant market potential for U.S. food and ingredient

suppliers, serving a population of 255 million people in 2015. In 2013, the product value of Indonesia’s

large and medium food and beverage processing industry was $70.6 billion. (Indonesian Rupiah (IDR)

745 trillion). Due to strengthening US dollar/IDR exchange rate, 2013 values (in U.S. dollars) decreased

from $78.1 billion (IDR 736 trillion) in 2012.

According to the National Statistical Agency (BPS), there were approximately 6,200 large and medium-

sized producers with 877,000 employees and 1.215 million micro and small scale producers with 3.389

million employees in 2013. Micro and small scale producers include home industries and products sold

in small roadside restaurants, retailer kiosks called warungs, and pushcarts called kaki limas. Micro and

small scale producer revenue was estimated at $18.7 billion (IDR 197 trillion) in 2013.

Several factors contributing to food processing industry growth are the introduction of new products,

flavors and package sizes; growing middle class, aggressive promotional activities; growth of modern

retail outlets; and growing health awareness. The Government of Indonesia (GOI) actively encourages

growth in the food processing industry.

In 2013, packaged foods sales growth ranged from 4.84 to 10.15 percent in volume (except for snack

bars at 24.76 percent and meal replacements at 40.41 percent). Packaged food growth is expected to

continue. In addition, more women in urban areas are entering the workforce and prefer the

convenience of processed food products. These consumers seek practical food products that are

affordable and offer health attributes such as weight management.

Indonesian ties to Europe are strong, influencing tastes and manufacturing methods. Australian, U.S.,

Korean, and Japanese packaged foods, however, are also common. In Jakarta, which is home to about

one-third of the upper and middle class, the growing Asian expatriate community is bringing new

Asian-style foods and flavors.

The growing middle class is also driving the food industry to diversify brands, and expand the range of

economical and premium products. The middle class population grew from 37 percent in 2004 to 56.7

percent in 2013. This group spends $2 to $20 a day (“Satu Dasawarsa Membangun Untuk Kesejahteraan

Rakyat – A Decade of Development for People Welfare” - Cabinet Secretary April 2014). The food

processing industry is challenged by the increasing prices of raw materials, packaging materials, and

energy.

Healthy eating is becoming more popular among educated consumers. This is particularly true amongst

Jakarta

those who have lived abroad or were exposed to western-style products by newspapers, magazines, and

television. Food manufacturers are responding to the demand for healthier products by providing

products with heightened vitamin content, healthier ingredients, lower sugar, cholesterol and fat

content. Wheat flour, dairy products, noodles, cookies, and frozen processed chicken fortified with

minerals and vitamins are commonly available.

Other products that are growing in popularity include fruit juice, snack bars, breakfast cereals, fresh and

pasteurized milk, ice cream, yogurt, pasta, frozen processed food (nuggets, sausages, meatballs, etc.)

and frozen snacks, such as shiumai, chicken and shrimp puffs, spring rolls, dumplings, and croquettes.

All ages and income levels enjoy snacking. Giving food as a gift is a tradition in Indonesia and remains

popular. Since the large majority of Indonesians are Muslim, most foods are produced using methods

and products that meet halal requirements.

Soft drink industry has grown in the past few years. Changing lifestyles and a new emphasis on

socializing after office hours and school encourages this trend. New products and variants with

attractive packaging and flavor have been launched. Interest in healthier products is driving fruit juices,

package coconut water, tea and sport/energy drinks. Demand for instant coffee continues to expand.

Food processors are differentiating products for different markets and demands. For example, premium

packaging is offered as well as small packs for price sensitive consumers. Private labels are also

growing and are easily found on supermarket shelves. Food packaging oriented to the food service

industry is being developed for the growing of food service sector. This supports the preference of

eating out for family events, socializing and business purposes, as well as catering to families that have

less time to prepare daily meals at home. Recently, several food processors (such as Cimory, Magnum

café and Richese) have expanded their businesses to cater to eating out. This trend is expected to

continue in 2015.

Small roadside restaurants (called Warungs) and kaki limas are ubiquitous and provide a variety of

meals and popular snacks for Indonesians. U.S. soybeans and beef offals (heart) are popular ingredients

for traditional dishes such as tempe and bakso (meat balls). Homemade soy milk in single-serving

plastic bags is popular in both urban and rural areas. Soymilk in UHT packaging is found increasingly

on supermarket shelves. Warung and kaki limas also drive sales of processed food in small and

individual packages in the confectionery, bakery, sweet & savory snack and dairy categories.

Fresh bakery products sold in shopping areas and malls are popular as gifts and snacks for the middle

and upper classes. Indonesians also visit high-end retail food stores to buy small packages of imported

snacks.

Rice is a staple eaten at every meal. However, noodles from imported wheat, especially instant noodles,

are a popular substitute and wheat consumption continues to grow. Dairy ingredients such as milk

powder are increasingly used as a food processing ingredient or are used to mix with and fresh milk.

Indonesia currently produces about 25 percent of its milk requirement.

Indonesian importers are sensitive to foreign exchange fluctuations and the fall of the Rupiah’s value in

late 2013 has adversely affected imports. Other threats to imports include the GOI’s trade protectionist

measures, and inconsistent and often confusing regulations. Since 2011, Indonesia’s Ministry of Trade

(MOT), and their FDA-equivalent National Agency of Drug and Food Control (BPOM), issued new

requirements for packaged food products and ingredients. Animal-based foods and horticultural

products also face import permit constraints from the Ministry of Agriculture (MOA) and MOT.

Table1. Indonesia: Retail Packaged Food Sales in 2013

Product Value (IDR Trillion)

Baby food (‘000 ton) 26.15

Bakery products (‘000 ton) 34.78

Canned/preserved food (‘000 ton) 5.23

Chilled processed food (‘000 ton) 1.25

Confectionery (000 ton) 19.30

Dairy products (not countable) 26.47

Dried processed food (‘000 ton) 87.55

Frozen processed food (‘000 ton) 6.23

Ice cream (million liters) 3.47

Noodles (‘000 ton) 23.71

Oils and fats (‘000 ton) 15.03

Pasta (‘000 ton) 0.23

Sauces, dressings and condiments (‘000 ton) 11.55

Spreads (‘000 ton) 1.00

Sweet and savory snacks (‘000 ton) 13.55

Meal replacement products, Ready meals, Snack Bars, Soup (‘000 ton) 1.59

Source: Euromonitor

Table2. Indonesia: Volume Growth of Packaged Food Sales

Package Food 2012- 2013 Growth (%) 2013 - 2018 Forecast Growth

Per year (%) Baby Food 7.47 6.09

Bakery 4.84 4.09

Canned/Preserved Food 10.06 7.97

Chilled Processed Food 9.62 8.92

Confectionery 5.16 4.14

Dairy 6.21 5.53

Dried Processed Food 5.34 4.89

Frozen Processed Food 9.24 7.91

Ice Cream 10.15 10.00

Meal Replacement 40.41 20.92

Noodles 7.78 6.40

Oils and Fats 6.55 4.30

Pasta 6.30 7.02

Ready Meals 5.08 6.41

Sauces, Dressing and Condiments 6.24 6.00

Snack Bars 24.76 13.42

Soup 6.84 6.31

Spreads 6.78 5.47

Sweet and Savory Snacks 6.70 6.64

Source: Euromonitor

Table3. Indonesia: Retail Beverage Sales in 2013

Product Value (IDR Trillion)

Bottle Water 20.05

Carbonates 9.03

Concentrates 8.05

Juice 1.96

RTD Coffee 0.28

RTD Tea 13.52

Sport and Energy Drinks 7.32

Source: Euromonitor

Table 4. Indonesia: Volume Growth of Soft Drinks Sales in Retails

Soft Drinks 2012- 2013 Growth (%) 2013- 2018 Forecast Growth

Per Year (%) Bottle Water 6.6 5.2

Carbonates 8.2 5.1

Concentrates 8.0 3.2

Juice 7.7 7.4

RTD Coffee 14.0 11.3

RTD Tea 7.2 8.0

Sports and Energy Drinks 12.6 10.4

Source: Euromonitor

Table5. Indonesia: Advantages and Challenges for U.S. Food Ingredients

Advantages Challenges

Market size – Indonesia’s 2015 population will

be approximately 255 million people.

Import regulations are often complex and non-

transparent. Permits can be difficult to obtain, thus

requiring a close relationship with a local agent.

Industry is constantly creating new products

based on consumer preferences. These new

products often require ingredients unavailable

domestically.

Quantities of ingredients for new product and

market trials are usually not enough to fulfill the

minimum required by U.S. suppliers.

U.S. products are considered high quality. Non-U.S. origin products are often less expensive,

and can be substituted with U.S. products.

Modern retail outlets, hotels and restaurants

are growing, thus requiring a wider variety of

food products.

Food ingredients from the region enter Indonesia

at lower prices due to the ASEAN Free Trade

Area, while food ingredients from the U.S. have

higher shipping cost.

Applied duties on most food and agricultural

products are 5 percent.

88% of the population

require

halal

-certified products

.

The chilled, frozen and canned/preserved meat and

meat products industry is growing. Local meat

supply is insufficient.

Meat and horticultural products must have an import

recommendation from MOA and an import permit

from MOT before importing to Indonesia.

Fruit juice production is growing and requires

fruits that are not produced domestically. Average purchasing power of the majority of the

population is weak.

II. ROAD MAP FOR MARKET ENTRY

A. ENTRY STRATEGY

The best way to overcome the hurdles associated with exporting to Indonesia is to select an agent. An

agent should be chosen based on his ability to assure the widest distribution of products and the ability

to undertake the marketing efforts necessary to create awareness for products among consumers. Price,

quality, and continuous supply are important to Indonesian agents but personal interaction with potential

business partners is also important. A face-to-face meeting will likely be needed, though younger

importers maybe more comfortable with establishing relationships via electronic communication.

Market research for product testing, price comparison and adjusting the product for local tastes is

important. Agents and distributors can help with market research and their assistance has proved to be

an effective strategy in expanding sales since they understand the regulatory system and can bridge

cultural differences.

Participating in food ingredient shows to introduce your products to a large audience and to meet with

potential importers is strongly suggested.

B. MARKET STRUCTURE

Food ingredients can be imported by agents, distributors, or food manufacturers. The diagram below provides an overview of

common distribution channels.

Figure1. Indonesia: Distribution Channels

Food processors commonly import primary inputs, such as frozen meat or beef offal, wheat flour, skim milk and whey

powder. Food processors generally purchase essential complementary inputs/food additive like flavorings, preservatives,

emulsifiers, and vitamins from a local agent or distributor because they are used in smaller quantities and often have limited

shelf life.

Food processors that depend on a consistent supply of a product may have an exclusive sales agreement with a local agent.

Some processors may choose to act as an importer if they find a better-priced alternative. Many multinational food

processors operating in Indonesia must follow global product specifications. These companies have central purchasing

offices, often in the United States, Europe or other Asian countries.

Larger, modern retail companies usually have an exclusive agreement with the processors to supply the food product that

they need. Processors will reach an agreement with the retail company to supply specified quantities at agreed upon intervals

and prices. In return, the retailer agrees to display products attractively and at agreed upon quantities. On the other hand,

smaller independent retail stores and traditional markets get products mostly from distributors.

Although cold chain facilities are generally available in urban areas, many food items are sold without any temperature

control in the more traditional distribution channels. Limited capital, low awareness of the benefits of refrigeration, and the

practice of buying and consuming meals on the spot are still very common and limit the development of a cold chain

network.

C. COMPANY PROFILES

Table 6. Indonesia: Major Food Processors

Company (Product

Types)

Sales in 2013 End-Use

Channels

Production Location

in Indonesia

Procurement

Channels

Dairy related products to include cheese, baby and toddler food

Dairygold Indonesia, PT

(cheese) N/A Retail and

HRI Cikarang - Bekasi (1) Direct; Importer

Danone Dairy Indonesia,

PT (+ yogurt) N/A Retail Cikarang – Bekasi (1) Direct;Importer

Diamond Cold Storage,

PT (+ice cream, yogurt,

cheese, dressing, fruit

juice)

N/A Retail and

HRI Jakarta, Cibitung-Bekasi (2) Direct

Frisian Flag Indonesia,

PT N/A Retail and

HRI Jakarta (2) Direct

Fontera Brands

Indonesia, PT N/A Retail Cikarang – Bekasi (1) Direct

Greenfields Indonesia,

PT N/A Retail and

HRI Gunung Kawi-Malang (1) Direct

Indofood Sukses Makmur

Tbk, PT (+snack food,

instant noodle, pasta,

sauces, ready meals,

confectionery, biscuit)

IDR25.09 trillion

(to include

Indomilk, PT and

Indolakto, PT)

Retail All over Indonesia, mostly

in Java (34) Direct, Importer

Indolakto, PT (+ ice

cream, oils &fats) N/A Retail Sukabumi (1) Importer

Indomilk, PT (+ yogurt) N/A Retail and

HRI Jakarta (1), Malang (1) Importer

Kalbe Farma Tbk, PT

(+meal replacement,

snack bars, juice)

IDR13.63 trillion

(to include

pharmaceutical)

Retail Bekasi, Bogor (2) Direct

Kraft Foods Indonesia,

PT (+cheese, sauces,

biscuit, Juice)

N/A Retail and

HRI Cikarang –Bekasi (1),

Cimahi (1) Direct

Mulia Boga Raya, PT

(cheese) N/A Retail and

HRI Cikarang - Bekasi (1) Direct

Milko Beverage Industry,

PT N/A Retail Sukabumi (1) Importer

Nestle Indonesia, PT (+

breakfast cereals,

confectionery, sauce,

instant coffee )

N/A Retail Pasuruan (1), Karawang

(1), Cikupa-Banten (1)

Lampung (1- coffee)

Direct

Nutricia Indonesia

Sejahtera, PT N/A Retail Bogor (1), Jakarta (1) Direct

Nutrifood Indonesia, PT

(meal replacement, fruit

juice)

N/A Retail Jakarta (1), Bogor (1) Importer

Sari Husada PT N/A Retail Yogyakarta (2) Direct; Importer

Ultrajaya Milk Industry

& Trading Co Tbk, PT Retail and

HRI Cimahi (1) Direct; Importer

Yakult Indonesia

Persada, PT (yogurt) N/A Retail Sukabumi (1) Importer

Yummi Food Utama, PT

(yogurt, cheese) N/A Retail and

HRI Jakarta (1) Importer

Baked goods Marizarasa Sarimurni, PT

(+spreads, chili sauces) N/A Retail Rangkasbitung – Banten (1) Importer

Nippon Indosari

Corporindo Tbk, PT IDR 1.50 trillion Retail Cikarang (3), Serang (1),

Pasuruan (1), Semarang (1),

Medan (1), Palembang (1),

Makassar (1)

Importer

Pangan Rahmat Buana,

PT N/A Retail Bogor (1) Importer

Swanish Boga Industrial,

PT N/A Retail Bogor (1) Importer

Breakfast Cereals, biscuit, snack food, snack bar

Amerta Indah Otsuka, PT

(snack bar , energy drink) N/A Retail Sukabumi (1) Direct; Importer

Arnott’s Indoneia, PT

(biscuit) N/A Retail Bekasi (1) Direct

Dua Kelinci, PT

(nuts/snack food) N/A Retail Pati (1) Importer

Garuda Food Group (+

chocolate confectionery,

snack food, dairy, tea,

biscuit)

N/A Retail 12 owned plants

(Pakanbaru, Lampung,

Bandung, Tangerang,

Bogor, Pati, Surabaya,

Banjarmasin, Makassar); 16

beverage contract

manufacturers; 11 food

contract manufacturers

Direct, Importer

Khong Guan Indonesia,

PT (biscuit) N/A Retail Bogor (2), Cikarang (1),

Semarang (1) Direct; Importer

Kobe & Lina Food CV

(sauces) N/A Retail and

HRI Tangerang (1) Importer

Konimex Pharmaceutical

Laboratories, PT

(confectionery, biscuit)

N/A Retail Solo (1) Importer

Manohara Asri, PT/Kapal

Api group (snack food) N/A Retail Sidoarjo (1) Direct; Importer

Mayora Indah Tbk, PT

(+chocolate

confectionery, biscuit,

breakfast cereals, instant

coffee)

IDR 12.0 trillion Retail and

HRI Bekasi (1), Tangerang (3),

Medan (2) Direct; Importer

Nabisco Food, PT

(biscuit) N/A Retail Cikarang-Bekasi (1) Direct; Importer

Orang Tua group (+dairy

products, yogurt, snack,

biscuit, chocolate &

sugar confectionery,

biscuit)

N/A Retail Java and Makassar (more

than 10 plants) Direct; Importer

Sekar group (+snack

food, sauces, frozen food) N/A Retail Sidoarjo (3) Direct; Importer

Siantar Top Tbk, PT

(snack food) N/A Retail Sidoarjo (1), Medan (1),

Bekasi (1), Makassar (1) Direct; Importer

Simba Indosnack

Makmur, PT (+ ready

meals, breakfast cereals)

N/A Retail; HRI Bogor (1) Direct; Importer

Tata Nutrisana, PT

(cereal) N/A Retail Tangerang (1) Importer

URC Indonesia, PT N/A Retail Cikarang (1) Direct; Importer

(+snack food,

confectionery)

Sauces, oils & fats, canned & dried products and noodles, soup and spread

ABC President

Indonesia, PT (instant

noodles)

N/A Retail Karawang (1) Direct; Importer

Asta Guna Wisesa, PT

(spread) N/A Retail Cikarang (1) Importer

Bina Karya Prima, PT

(+oils & fats) N/A Retail and

HRI Bekasi (1) Importer

Heinz ABC Indonesia,

PT (+ sauces, fruit juice) N/A Retail and

HRI Tangerang (3) Direct; Importer

Nissin Mas, PT (+instant

noodles) N/A Retail Semarang (1) Direct; Importer

Pido, PT (spreads) N/A Retail Cikarang (1) Importer

Pondan Pangan Makmur

Indonesia, PT (baking

mix)

N/A Retail and

HRI Tangerang (1) Importer

Perusahaan Industri

Ceres, PT (Petrafood

Group) (+chocolate

confectionery, spread,

chocolate powder)

$370 million

(Indonesia); $139

(regional)

Retail, HRI

and Food

Processing

Bekasi (1), Bandung (1) Direct; Importer

Pure Foods Suba Indah,

PT (+sauces, chilled

processed food)

N/A Retail and

HRI Bogor (1) Importer

Salim Ivomas Pratama

Tbk, PT (oils & fats) IDR 13.8 trillion Retail, HRI

HRI and

Food

Processing

Jakarta (1) Importer

Sayap Mas Utama,

PT/Wingscorp) (+instant

noodles, sauces, fruit

juice, instant coffee)

N/A Retail Surabaya (1), Bekasi (1) Direct; Importer

Sinar Meadow

International, PT (+ oils

& fats)

N/A Retail, HRI

and Food

Processing

Jakarta (1) Importer

Tiga Pilar Sejahtera Food

Tbk, PT (+noodles, snack

foods)

N/A Retail and

HRI Solo, Bogor, Medan,

Sidoarjo (4) Importer

Unilever Indonesia Tbk,

PT (+ice cream, spreads,

soup, sauces, oils & fats

+fruit juice)

IDR 27.3 trillion Retail and

HRI Cikarang (3) Direct; Importer

Welco, PT (spread) N/A Retail Surabaya (1) Importer

Frozen, chilled and canned/preserved processed products Aroma Duta Mandiri, PT N/A Retail and

HRI Bali (1) Importer

Belfoods Indonesia, PT N/A Retail Bogor (1) Importer

Bumi Menara Internusa,

PT N/A Retail and

HRI Surabaya (1), Malang (1) Direct; Importer

Eloda Mitra, PT (+soup) N/A Retail Sidoarjo (1) Direct; Importer

Frozen Food Pahala, PT N/A Retail Bogor (1) Importer

(+ ready meals)

Kemang Food Industries,

PT N/A Retail and

HRI Jakarta (1) Importer

Macroprima Pangan

Utama, PT ( + yogurt,

milk, chocolate

confectionery)

N/A Retail Cikupa-Tangerang (1) Importer

Madusari Nusaperdana,

PT N/A Retail and

HRI Bekasi (1) Direct; Importer

Prima Food International,

PT (Charoend Phokphand

group)

N/A Retail and

HRI Cikande-Tangerang (1) Importer

San Miguel Pure Foods

Indonesia, PT N/A Retail and

HRI Bogor (1) Importer

Soejasch Bali, PT N/A Retail and

HRI Bali (1) Direct; Importer

So Good Food, PT

(+soup) N/A Retail Serang-Banten (1) Importer

Confectionery

Agel Langgeng, PT

(Kapal Api group)

(+biscuit)

N/A Retail Bekasi, Pasuruan (2) Retail and HRI

Perfetti Van Melle

Indonesia, PT N/A Retail Bogor (1) Importer

Kino Sentra Industrindo,

PT N/A Retail Semarang (1) Importer

Yupi Indo Jelly Gum, PT N/A Retail Bogor (1) Importer

Ice cream

Campina Ice Cream

Industry, PT N/A Retail and

HRI Surabaya (1) Direct; Importer

Beverages Lassale Food Indonesia,

PT (fruit juice, +

dressing, Del Monte

sauces & dressing)

N/A Retail and

HRI Bogor (1) Direct; Importer

Berri Indosari , PT (fruit

juice) N/A Retail and

HRI Jakarta (1) Direct

Coca-Cola Indonesia, PT

(soft drink, fruit juice) N/A Retail and

HRI Cibitung-Bekasi, Medan,

Padang, Lampung,

Bandung, Semarang,

Surabaya, Denpasar (8)

Direct

Sinar Sosro, PT (Rekso

group) (fruit juice) N/A Retail and

HRI Cikarang (1) Direct; Importer

Jaya Santos Abadi, PT

(Kapal Api group)

(instant coffee/coffee

mix)

N/A Retail Sidoarjo (1) Direct; Importer

Sari Incofood

Corporation, PT (instant

coffee/coffee mix)

N/A Retail Medan (1) Direct; Importer

Canned fish/beef/vegetable

Canning Indonesia N/A Retail Bali (1) Direct, Importer

Products, PT (fish, meat+

ready meals+seasoning)

Jakarana Tama, PT

(+instant noodle , sauces) N/A Retail Bogor (1), Medan (1),

Surabaya (1) Direct; Importer

Maya Muncar, PT N/A Retail Banyuwangi Direct; Importer

Medan Tropical Canning,

PT N/A Retail Medan (1) Direct; Importer

Surya Jaya Abadi

Perkasa, PT (canned

vegetables/meat, sauces-

CIP brand)

N/A Retail Jember (1) Importer

Alcoholic beverages Arpan Bali Utama, PT

(using local wine and

imported grape juice)

N/A Retail and

HRI Bali (1) Direct; Importer

Bali Hai Brewery

Indonesia, PT( beer ) N/A HRI Bekasi (1) Direct; Importer

Delta Jakarta, Tbk,

PT/San Miguel

corporation (beer )

IDR 1.71 trillion HRI Bekasi (1) Direct

Multi Bintang Indonesia

Tbk, PT (beer) IDR1.56 trillion

(Jan-Sep 2012) HRI Mojokerto (1), Tangerang

(1) Direct

Food Ingredients BT Cocoa (cocoa

powder, cocoa butter,

cocoa liquor)

N/A Food

processing

and HRI

Tangerang (1) Direct

Foodex Inti Ingredients,

PT (seasoning, flavor

,meat extract)

N/A Food

processing Cikarang-Bekasi (1) Direct

Gandum Mas Kencana,

PT (dessert mix, baking

cocoa bar)

N/A HRI and HRI Tangerang (1) Direct

Halim Sakti Pratama, PT

(cake emulsifier, baking

powder, jelly powder)

N/A HRI Surabaya (1) Direct

Indesso Niagatama, PT

(alavor, sweetener,

seasoning)

N/A Food

processing Bogor (1), Purwekerto (1) Direct

Indofood Sukses Makmur

Tbk, PT (wheat miller) N/A Food

Processing,

HRI and

Retail

Jakarta (1), Surabaya (1) Direct

Jaya Fermex, PT (yeast,

bread improver, flavor,

premixes fruit filling)

N/A Food

processing

and HRI

Cimanggis-Bogor (1) Direct

KH Roberts Indonesia,

PT (food flavor, food

color)

N/A Food

processing Bogor (1) Direct

Kievit Indonesia, PT

(creamer) N/A Food

Processing Salatiga (1) Direct

Pachira Distrinusa, PT

(extract, concentrate,

thickener, stabilizer,

N/A Food

processing Tangerang Direct

flavor, seasoning

Sukanda Djaja, PT

(baking dough) N/A Retail and

HRI Cikarang (1) Direct

Santos Premium Krimer,

PT N/A Food

Processing Sidoarjo (1) Direct

Source: Website, Media

D. SECTOR TRENDS

Consumption Trends Health Awareness: More consumers are making decisions based on health and wellness concerns and fortified foods are

increasing in popularity. As a result, consumption of many products is expected to grow. These include:

sports drinks

liquid ready-to-drink milk

yogurt and other dairy products

energy foods

fortified foods

high-protein snacks

Processed frozen food products: More consumers are turning to frozen/chilled processed foods (especially poultry products

like nuggets and sausages) outside of urban areas due freezers in traditional wet markets and major retail expansion and its

very convenient for hectic mother.

Private label: There is an increasing tendency for hypermarkets and supermarkets to sell private label food products. More

and more consumers seek private labels for commodity items such as rice, cooking oil, and sugar as well as sauces, snack,

bakery products and processed frozen/chilled products.

Popular flavors:

strawberry, vanilla, and chocolate for ice cream, raisins and other berry fruit flavors

fruity flavors for yogurt

exotic cookie flavors

Alternative staple foods: Rice is an important staple for most Indonesians and is present at most meals. Noodles, bread,

pasta, milk and cereals are starting to become important substitutes. As more food service outlets feature pasta and spaghetti

on their menu, spaghetti is becoming more popular.

Packaging: Smaller package sizes (bite size) are preferred due to convenience and price considerations. Small/single

portions are also considered a good way to manage weight and to limit consumption for health concerns. Inconsistent and

unsteady incomes force many Indonesians to purchase food in small quantities, in some cases in daily portions. Toy inserts

and individual cartons with bright colors and attractive designs including popular cartoon characters are popular for children.

Shelf-stable milk and fruit juice in 90 and 125-ml packaging, as well as bite-sized snacks in smaller package sizes for school

children have been successfully introduced in the last few years. Single serving jelly and ready to eat sausages for kids are

also popular.

Table7. Indonesia: Popular processed food products in retail outlets during 2012

Product type Processed food

Baby food Powder toddler milk formula (Nestle lead to 25% share baby food)

Baked goods Bread, and filled pastry

Biscuit Chocolate coated biscuit and sandwich /filled biscuit (wafer)

Breakfast cereal Children breakfast cereal and hot cereal

Canned/preserved

food

Canned sardines in chili sauces, corned beef and sausages

Cheese Un-spreadable processed cheddar cheese, cheddar, permesan

Chilled processed

food

Sausages and meat ball

Chocolate

confectionery

Fill chocolate tablets (range of nut filled) and plain milk chocolate.

Dried processed

food

Package rice and instant noodle

Milk products Fortified flavored UHT milk drinks, fortified flavored powder milk, fresh &

pasteurized milk, condensed & evaporated milk, soymilk

Frozen processed

food

Frozen processed poultry (chicken nugget, seasoned chicken wings ,

karaage), frozen processed beef (meat ball, sausages, beef patty), frozen

processed fish (breaded fish fingers, coated prawns, crabsticks), frozen

Chinese snack (dim sum, spring rolls, chicken/fish/shrimp dumpling,

croquettes)

Ice cream Chocolate, strawberry, vanilla, blueberry, mocha, coffee, mix flavor

Yogurt Drinking yogurt, spoonable yogurt with fruit flavor

Pasta Dried pasta (spaghetti and fettuccini)

Sauces, dressing,

and condiments

Soy sauces, chili sauces, mayonnaise, salad dressing, ketchup, pasta sauces,

and ethnic cooking sauces.

Spreads and preserve Chocolate, srikaya (egg and coconut milk based), fruit flavor/strawberry

jam, peanut, honey

Sweet and Savory

Snacks

Chips, extruded snacks, nuts, non-microwave popcorn, ethnic Indonesian

snack, and cup jelly

Source: Euromonitor

Table8. Indonesia: Popular soft drink products during 2012

Product type Soft drink

Carbonates Cola and non-cola carbonates

Concentrate Sachet energy drink and fruit-based powder concentrate, liquid concentrate

(squash and syrup)

Fruit/vegetable

juice

100% juice (fruit, vegetable or mix), nectars, juice drinks, fruit-flavored

drinks Source: Euromonitor

Note: The government strictly controls alcoholic beverage production, distribution, sale, consumption,

and advertisement in Indonesia because the majority of Indonesians are Muslim. Alcoholic drinks are

subject to specific import and excise duties.

Foreign Company Profiles

A number of multinational companies have food and beverage manufacturing plants in Indonesia; some

were acquisitions of existing companies while others are joint ventures.

Table9. Indonesia: Foreign Companies active in Indonesia

Company Notes ABC President, PT

(Hongkong and Taiwan) The company is a joint venture company with Nan Gai Investment Co. Ltd, Hongkong and

Yeuan Yeou Enterprises Co. Ltd, Taiwan. The company produces sauces and instant noodle.

Ajinomoto Indonesia,

PT (Japan) Ajinomoto products are manufactured in Mojokerto since 1969. The company produces

flavor enhancer (Ajinomoto), flavor seasoning (Masako), ready to use seasoning (Sajiku),

and oriental seasoning (Saori). Currently, the company has two plants in Karawang-West

Java and Mojekerto-East Java.

Amerta Indah Otsuka,

PT (Otsuka

Pharmacutical Co. Ltd,

Japan)

PT. Otsuka Indonesia launched canned Pocari Sweat in 1989. Then in 1997, PT. Amerta

Indah Otsuka was established and start to produce Pocari Sweat domestically at Sukabumi-

West Java i in 2004. The company produces Soy Joy in 2007. In 2010, new manufacturer

was used in Kejayan – East Java

Arnott’s Indonesia, PT

(The U.S.) PT Arnott’s Indonesia ia a subsidiary of Campbell Soup Company Australian subsidiary and

produces biscuit..

Asahi Indofood

Beverage Makmur, PT (Japan)

Asahi Indofood Beverage Makmur, PT is a joint venture company with PT. Indofood CBP

Sukses Makmur, Tbk starting in 2012 that produce non-alcoholic beverages

Berri Indosari, PT

(Berrivale Orchads, Ltd,

Australia)

PT. Berrivale Indosari was established in 1995 and in 2000 has changed to PT Berri

Indosari. The company produces fruit juice in its plant at Serang-Banten

Ceres Meiji Indotama,

PT (Japan) The company is a joint venture between Meiji Seika Khaisa Ltd, Meiji Seika Singapore,

Petra Foods Ltd and PT Perusahan Industri Ceres. The company was built in 1991and the

plant is in Karawang. The company produce snack food for export.

Charoen Pokphand

Indonesia, PT (Thailand) The company was established in 1972 as a feed miller for poultry feed. Currently the

company also produces day old chick and frozen processed products. The processed frozen

processed products are produced in Cikande-Banten (1997), Salatiga-Central Java (2010),

Medan-North Sumatera (2011), Sidoarjo and Mojokerto both in East Java (2006).

Coca-Cola Bottling

Indonesia, PT

(Australia)

Coca-Cola Amatil from Australia entered Indonesia in 1992, however its Indonesian partner

was already producing and distributing Coca-Cola products under license from the Coca-

Cola Company since 1932. It operates under the name PT Coca-Cola Bottling Indonesia

with a brand portfolio consisting of Coca-Cola, Diet Coke (1996), Sprite, Fanta, Schweppes,

Frestea (2002), A&W, Powerade Isotonic, Aquarius, minute maid (2008), and Ades-water.

The company has 9 owned bottling plants located in Cibitung-Bekasi, Medan, Palembang,

Lampung, Cikedokan, Bandung, Semarang, Surabaya, Denpasar and another contracted

bottling company in Manado. The company also exports beverage base products to

Singapore, Australia, New Zealand, Cambodia, Vietnam and Thailand from its plant in

Cibinong since 1997

Danone Group (France)

There are six companies as sub diary of Danone group in Indonesia, Tirta Investama, PT

(water), Nutricia Indonesia Sejahtera, PT (baby nutrition), Sari Husada, PT (baby nutrition),

Sugizindo, PT (baby nutrition) Danone Dairy Indonesia, PT (dairy products), and Nutricia

Medical Nutrition, PT (medical nutrition).

Delta Jakarta Tbk, PT

(Philippines) Delta Jakarta was established in 1932 by German firm Archipel Brouwrij. In 1970, the

company was established as Delta Jakarta, PT and in 1984 went public as Delta Jakarta,

Tbk, PT. Currently majority share is owned by San Miguel Malaysia. The company

produces various brand of beer.

Effem Indonesia, PT

(The U.S.) The company established the cocoa processing plant in Makassar in 1996. The product is

sold to Mars manufacturing’s plants in other countries and to Ceres group.

Frisian Flag Indonesia,

PT (Dutch)

Per 2009, Friesland Campina Indonesia has three plants in Indonesia; PT. Frisian Flag

Indonesia (2 in Jakarta) and PT Kievit Indonesia in Salatiga. PT. Frisian Flag Indonesia was

built the first plant in 1969 and the second one in 1974. The company produces powder

milk, drinking milk and sweetened condensed milk. PT Kievit Indonesia was built in 2005

and produces creamer, fast powder and capsulated functional ingredients.

Heinz ABC Indonesia,

PT (H.J. Heinz

Company Limited, The

U.S.)

PT ABC Central Food Industry that established in 1975 became PT. Heinz ABC Indonesia

in 1999. The company has three plants in Indonesia, Jakarta, Karawang and Pasuruan. The

company produces sauces, canned fish and beverage.

Indofood Fritolay, PT

(The U.S.) Indofood built a joint venture company with Seven-Up Nederland B.V. – Pepsico Inc. in

1990. The company produced snack food with various brand to include Lay’s,

Intan Kenkomayo

Indonesia, PT (Japan) PT So Good Food built a joint venture company with Ke4nko Mayonnaise Co., Ltd in July

2013. The company produces mayonnaise, sauces and pasteurized liquid egg in its plant in

Cakung-East Jakarta.

Kraft Foods Group (The

U.S.) Kraft Foods own PT Nabisco Foods and having joint venture company with PT Ultra Jaya

to produce cheese.

Kraft Ultra Jaya

Indonesia, PT (Kraft

General Food Ltd, The

U.S.)

PT Ultra Jaya Indonesia signed a licensing agreement with Kraft general Food Ltd produce

cheese products in 1981. In 1994 the partnership was upgraded by establishing joint

venture. The manufactures locates in Bandung.

KH Roberts Indonesia,

PT (Australia and

Singapore)

KH Roberts Indonesia and PT Jutarasa Abadi has built a partnership to supply food

flavoring and coloring for food, beverage and pharmaceutical products since 1985. The

company has a plant in Bogor.

Kewpie Indonesia, PT

(Japan) PT Kewpie Indonesia was built in February 2013 as joint venture between Mitsubishi

Corporation and Kewpie Egg Corporation. The company has a manufacturer in Bekasi and

produce mayonnaise and dressing in November 2014

Lotte Indonesia, PT

(Japan) The company was built in 1994 to produce gum and snack food in its Cikarang plant. PT

Lotte Indonesia is a joint venture between Lotte, Gudang Garam group and Marubeni.

Megmilk Snow Brand

Indonesia, PT (Japan) The company is a joint venture company between Megmilk Snow Brand Co., Ltd., PPT.

Rodamas Indonesia and Itochu Corporation. The comapny was built in 2012 to produce

cheese and has a plant in Cikarang.

Morinaga Kino

Indonesia, PT (Japan) The company is a joint venture company with Morinaga & Company Limited from Japan in

2013. Originally the company was named PT. Kinosentra Industrindo that produces snack

and confectionery. Currently Kino Corporation has 49% share and Morinaga & Co. Ltd has

51% share.

Multi Bintang Indonesia

Tbk, PT (Singapore) Multi Bintang was established in 1929 and become public listed company in 1981. In 2010,

Asia Pacific Breweries-Singapore based acquired majority share. The company produces

various brand of beer.

Nestlé Indonesia, PT

(Switzerland)

Nestlé Indonesia as a subsidiary of Nestle SA is one of the leading International food

companies in Indonesia. Their production line includes dairy (Dancow, Carnation, Bear

brand), coffee (Nescafé brand), tea (Nestea brand), other beverages (Milo brands), sauces

(Maggi brand), chocolate and candies (Kit-Kat, Fox’st and Polo brands), baby foods,

cereals, and health nutrition. Nestlé’s started in Indonesia was started in 1971 when Nestlé

built a milk processing plant in Pasuruan- East Java. Currently the company has three

plants, Pasuruan produces dairy products, Panjang-Lampung produces coffee products, and

Cikupa Banten produces confectionery..

Nestlé dominates the dairy product and baby food market with sweetened condensed milk,

milk powder, baby formulas, and liquid milk.

Nestlé Indonesia PT and Indofood Sukses Makmur Tbk PT, each own half of a joint

venture. Nestlé Indofood Citarasa Indonesia PT (NICI) was established in February 2005.

The joint venture focuses on producing sauces, dressings, and condiments. The company

markets both Indofood and Nestlé’s brands, including Indofood brand, Piring Lombok and

Maggi.

Nippon Indosari

Corporindo Tbk, PT

(Japan)

The company was established in 1995 and starting produces various type of bread in 1997.

Nissin Mas, PT (Japan) The company was established in 1992 as a joint venture between Nissin Food Product Co.,

Ltd and Roda Mas. Currently Indofood and Nissin Food Product Co., Ltd has a major share

and the third share is hold by Nissho Iwai Corporation. The company produce instant noddle

in Cikarang plant.

Pepsi-Cola Indo

Beverages, PT (The

U.S.)

The company was established by Indofood CBP Sukses Makmur and PepsiCo. Currently

Asahi Group Holdings Ltd also involves in the company. The company has a plant in

Purwakarta and produce Pepsi, 7 Up, Mirinda, Gatorade, Tropicana Twister, Tehkita, and

Frutamin.

Perfetti Van Melle

Indonesia, PT (Italia) The company was established in 1997 with the name of PT Perfetti. Then in 2002, the

company and PT Van Melle Indonesia became PT Perfetti Van Melle Indonesia due to the

merging of Perfetti Group (Italia) and Van Melle group (Netherlands) in 2000. The

company produces confectionery at its plant in Bogor for domestic and export to Muslim

countries..

Petra Foods Limited

(Singapore) Since 1950’, Petra Foods Limited was an Indonesian company that produced Silver Queen

and Ceres brands. In 1984, the company was registered in Singapore. The company

produces chocolate confectionery for domestic and export to Singapore, Malaysia, Thailand

and Philippines. In 1988 built a cocoa processing factory in Philippines and Thailand in

1989. Then the company acquired cocoa processing plants in Mexico and Brazil in 2003,

then expand to Hamburg and France in 2007. In 2013the company terminated the cocoa

ingredient business and sold to Barry Callebaut. Now the group focus on branded consumer

business only

San Miguel Pure Foods

Indonesia, PT

(Philippines)

The company as one of subsidiary of San Miguel Pure Foods Company was established in

1995 and produces processed meat products.

Suntory Garuda

Beverage, PT (Japan) This is a joint venture company between Suntory Beverage & Food Ltd and the Indonesian

food and beverage company Garuda Food Group. The company was established in 2001

and produce soft drink in 4 plants (Pati-Central Java, Gresik-East Java, Rancaekek and

Bogor –West Java, and Banjarbaru-East Kalmantan)

Unilever Indonesia, Tbk,

PT and its subsidiaries

The company established in Indonesia in1933. Unilever Indonesia’s portfolio includes many

of the world’s best known and well-loved brands to include food and beverages (27%) such

as Wall’s (1992), Blue Band (1936), Royco, Bango (2000, Sariwangi tea (1990), Buavita

fruit juice (2008) and snack (2004). The Company owns six factories in Jababeka

Industrial Estate, Cikarang, Bekasi and two factories in Rungkut Industrial Estate, Surabaya,

East Java, with its head office in Jakarta. Its products consist of about 43 key brands and

1,000 SKUs which are sold through a network of about 500 independent distributors

covering hundreds of thousands of outlets throughout Indonesia. Products are distributed

through its own central distribution centers, satellite warehouses, depots and other facilities.

URC (Universal Robina

Corporation) Indonesia,

PT (Philippines)

The company produces snack, wafers, candies, chocolate, and beverage at its plants in

Cikarang.

Yakult Indonesia

Persada, PT (Japan) This is a company that produces yakult in its plant in Sukabumi starting 1996 under license

of Yakult Honsa Co. Ltd.

Source: Website, Media

III. COMPETITION

Competition among food processors is expected to increase as the market matures. As companies grow,

it is expected that food processors will slowly integrate their operations, expanding their business

upstream and working with farmers to procure raw material directly.

Factors contributing to ingredient import growth include the establishment of new manufactures,

production expansion, expanding product development, and improved distribution systems and storage

facilities. Several processors plan to expand their businesses serving baking sector, food service, and

retail.

On February 27, 2009, Australia and New Zealand signed a free trade agreement with ASEAN (AANZ-

FTA). The agreement calls for Indonesia to gradually eliminate the tariff on imports of many Australian

and New Zealand products. Most tariffs will be gradually reduced starting in October 2009 with

exceptions for some of dairy products, meat products, fish (such as grouper, tilapia and fish fillet), fruit

and vegetable products (such cabbages, carrot, tomato and potatoes, banana, pine apple, avocado,

mandarin and mango). AANZFTA is the first region-to-region free trade agreement for both ASEAN

and Australia and New Zealand. It is ASEAN’s fourth free trade agreement with a dialogue partner after

China, Korea, and Japan.

As of December 2012, Indonesia has free trade agreements (FTA) with ASEAN-South Korea, ASEAN-

China, ASEAN-Australia and New Zealand, Indonesia-Japan; Indonesia-Pakistan. Despite these FTAs,

exporters and importers still face lengthy and cumbersome custom procedures and non-tariff measures.

The ASEAN Economic Community (AEC) will be integrated in 2015. AEC envisages the following key

characteristics: (a) a single market and production base, (b) a highly competitive economic region, (c) a

region of equitable economic development, and (d) a region fully integrated into the global economy.

Table10. Indonesia: Competition between Domestically Produced Goods and Imports 2013

Product

Category

Major

Supply

Sources

Strengths of Key Supply

Countries

Advantages and

Disadvantages of Local

Suppliers Wheat

Net Volume Import:

6,7 million ton

Value: $2.39 billion

Australia

56.53% Canada

20.36.9% U.S. 7.95% India 5.65% Ukraine

4.52% Russia 3.29%

Australia has a geographic

proximity. Indonesia prefers

Australian wheat due quality

preference for specific purpose

(noodle)

No wheat produced domestically

Sugar

Net Volume Import:

3,3 million ton

Thailand

37.45% Brazil 34.01% Australia

20.07% South Africa

Thailand has a geographic proximity

and Brazil is a major supplier. Indonesia does not produce raw

sugar

Value: $1.73 billion 3.16% El Salvador

2.86%

Soybean

Net Volume Import:

1.7 million ton

Value: $1.10 billion

U.S. 92.03% Argentina

5.08%

Indonesia prefers U.S. soybeans due

to characteristics optimized for

tempeh and tofu. The U.S. has exportable supplies and

good quality.

Soybean is not produced extensively

in Indonesia.

Dairy excl cheese

Net Volume Import:

363 thousand ton

Value:$1.30 billion

U.S. 23.10% New Zealand

22.15% Australia

10.73% France

10.17% Netherlands

6.93% Germany

5.83% Belgium

4.77% Poland 4.10%

New Zealand and Australia have a

geographic proximity. Europe offers

lower prices and they have milk

processing plants in Indonesia.

Less dairy produced locally (only

around 25%)

Wheat flour

Net Volume Import:

205 thousand ton

Value: $82.07

million

India 29.125 Turkey

29.07% Sri Lanka

27.67% Ukraine

4.51%

India, Turkey and Sri Lanka offer

competitive prices compared to local

wheat flour.

Locally-produced wheat flour price

is higher than imported flour but has

a good quality and has been fortified

with Zn, Fe, B1, B2 and Folic acid

Fish and Seafood

products

Net Volume

Import:154 thousand

ton

Value:$228.28

million

China 51.32% Malaysia

9.89% India 9.79% Pakistan

6.79% Japan 3.59%

Tuna, Mackerel, and sardines are

used as an additional source for the

fish canning industry.

Local fish and seafood production

is significant in volume

Corn starch

Net Volume Import:

60.89 thousand ton

Value: $30.44

million

China 52.97% India 34.31% South Korea

5.23% Argentina

3.53%

China and India offer competitive

prices. Local corn starch is not produced

extensively.

Cocoa beans

Net Volume Import:

30,766 ton

Value:$77.42

Ghana

26.82% Cote d Ivory

26.79 % Papua New

Guinea

17.64% Ecuador

Industry needs a variety of cocoa

beans for blending. Domestic production is limited

million

11.24% Cameroon

9.56%

Potato starch

Net Volume Import:

11, 799 ton

Value: $8.96

million

Netherland

32.35% Germany

25.09% Denmark

19.54% France

15.76%

European countries offer competitive

prices and consistent supply. No potato starch produced locally.

Dehydrated potato

Net Volume Import:

6,086 ton

Value:$9.25 million

Germany

64.4% The U.S.

23.7% Netherlands

6.52% Poland

2.53% India 2.45%

European countries offer competitive

prices and consistent supply. Aggressive promotion of U.S.

dehydrated potato is effective.

No domestic production.

Non-alcoholic

preparation used in

beverages

manufacturers

Net Volume Import:

4,321 ton

Value:$62.21

million

China 35.29% Denmark

13.72% Singapore

11.36% Italy 8.75% The U.S.

6.02% Taiwan

4.63% South Korea

3.33%

Consumers seek novel flavors and

new concepts. Domestic beverage manufacturing is

growing and requires inputs for new

flavors.

Onion powder

Net Volume Import:

4,166 ton

Value: $12,13

million

U.S. 94.89% China 2.33%

U.S. produces high quality onions

with whiter color and high total solid

content.

No onion produced locally.

Chili powder

Net Volume Import:

3,046 ton

Value: $3.95 million

India 72.03% China 19.89% Germany

3.74%

Those countries offer competitive

price. No chili powder produced locally.

Garlic powder

Net Volume Import:

2,854 ton

Value: $5.65 million

China 92.78% U.S. 7.22%

China offers competitive price. No garlic powder produced locally.

Bakery dough

Germany

22.21% Singapore

Indonesia prefers Asian type of

bakery products and also opens to

new Western type of bakery

Domestic production is growing.

Net Volume

Import:2,179 ton

Value: $5.70 million

17.03% Malaysia

12.62% Japan

12.57% Australia

10.00% Thailand

8.54% Vietnam

6.84% U.S. 5.51%

products.

Fresh Fruit

Net volume import:

499 thousand ton

Value: $637.94

million

China 58.57% Thailand

12.30% U.S. 9.55% Australia

4.43% United Arab

Emirats

2.56% Vietnam

2.18% Egypt 2.01%

China offers very competitive prices. Local fresh fruit is limited in variety

and inconsistent in supply.

Processed fruit &

vegetables

Net volume import:

112.70 thousand ton

Value: $167.32

million

China 30.04% U.S. 29.02% Canada

7.94% Netherlands

5.95% Thailand

5.79% Germany

3.70%

China and Thailand supply processed

fruit and vegetable products. Brands

are well known and prices are

competitive. U.S. and Canada supply

French fries and frozen vegetables

Limited processed fruit and

vegetables products produced

locally.

Red meats fresh,

chilled, frozen

Net volume import:

56.54 thousand ton

Value: $ 249.33

million

Australia

74.75% New Zealand

18.52% U.S. 6.46%

Australia and New Zealand have

competitive pricing and no reported

cases of FMD and BSE.

Shortage of supply. Most domestic

production is sold fresh to

traditional markets and modern

retail outlets. Meat processing industry and food

service sector relies on import.

Cheese and curd

Net volume import:

21,422 ton

Value: $ 97.43

million

New Zealand

55.11% U.S. 23.03% Australia

14.42%

New Zealand and Australia have a

competitive pricing and geographic

proximity.

Domestic cheese processing

industry and cheese application in

food processing industry are

growing, but local ingredients

supplies do not exist.

Tree nuts

Net volume import:

5,014 ton

Vietnam

30.16% US 26.86% Thailand

10.51%

Thailand supplies repackaged tree

nuts from the U.S. Local tree nut production is limited.

Value: $20.06

million Benin

10.07% China 7.48% South Africa

4.57%

Source: GTA

IV. BEST PRODUCT PROSPECTS

A. Product Present in the Market with Sales Potential

Below is a list of major ingredients used by the Indonesian food processing industry.

Table11. Indonesia: Products Present in the Market with Good Sales Potential

Product

Category

2013

Import

(thousand

tons)

2013

Import

($mil)

5 Yr. Avg

Annual

Import

(Volume)

Growth

(%)

Import

Tariff

Rates

(%)

Key

Constraints to

Market

Development

Market

Attractiveness

for USA

Wheat

6,737 2,439

8.53 5 Competition from

Australian Demand for high

quality flour for

bakery industry

Sugar

3,344 1,730 27 Rp

790/kg Indonesia prefers

cane sugar over

sugar beet.

Food processing

industry seeks low

cost inputs.

Soybean

1,785 1,101 10 5 Trade barriers and

food sovereignty

issues.

Tempeh and tofu

made from soybean

are staple proteins.

The soymilk

industry is growing.

Dairy excl

cheese

363 1,304 8 5 Price competition

with Australia,

New Zealand and

European

countries.

Domestic dairy

processing industry

demand is growing.

Wheat flour

205 82 -11 5 Price competition

with India and Sri

Lanka.

U.S. wheat is

needed by milling

industry.

Non-alcoholic

preparation

used in

beverages

manufacturers

4.3 62 -3 5 Complicated

import permits

processing.

Limited fruit

options available in

domestic market for

fruit-based industry

Onion powder

4 12 22 5 No concerns. Instant noodle and

sauces/condiment

industry needs

onion as a

seasoning

Chili powder

3 3.9 6 (data

available

since 2012)

5 No concerns. Instant noodle and

sauces/condiment

industry needs chili

as seasoning

Garlic powder

2.8 5.6 19 5 No concerns. Seasoning for

instant noodles,

sauces/condiments

and snack. Food

industry is growing

Bakery dough

2 5.7 -1 10 No concerns. Bakery industry is

growing.

Fresh Fruit

489 637 4 5 20% for

mandarin

&

mangoes

Current

Government of

Indonesia

regulations inhibit

some US fresh

fruit import

Health awareness

and rising middle

class pushes

demand of quality

fresh products

Processed fruit

& vegetables

112 167 11 Mostly 5 Complicated

import permitting

process.

Food service sector,

bakery and biscuit

industry are

growing and need

processed

fruit/vegetables.

Cheese and

curd

21 97 16 5 Cheese

manufacturers

must be approved

by the GOI before

they can export to

Indonesia.

Cheese applications

in food processing

are growing.

Tree nuts

5 20 12 5 Price concerns. Bakery industry is

growing and

consumer

understands U.S.

tree nut quality.

Source: GTA

B. Product Not Present in Significant Quantities but which have Good Sales Potential

Table12. Indonesia: Products Not Present in Significant Quantities but That Have Good Sales

Product

Category

2013

Import

(thousand

tons)

2013

Import

($mil)

5Yr. Avg

Annual

Import

(Volume)

Growth

(%)

Import

Tariff

Rates

(%)

Key

Constraints to

Market

Development

Market

Attractiveness

for USA

Corn starch

60 30 15 10 Price concerns. Corn starch is a key

ingredient in the

snack food industry.

Potato

starch

11.8 8.9 30 5 Price concerns Potato starch is

needed by snack

industry.

Dehydrated

potatoes 6.0 9.2 19 5 Price concerns. Snack food industry

is growing.

Source: GTA

C. Products not Present (only a few) in the Market Because They Face Significant Barriers

The frozen processed beef and poultry industry is growing. However, the GOI regulates beef and

poultry imports. Indonesia has a number of major integrated poultry companies that own up-stream and

down-stream production facilities. There is also a possibility to supply alcoholic preparations used by

alcoholic beverages manufacturers. The GOI has set strict import regulations and high tariffs for

alcoholic products.

Table 13. Products not Present in the Market Because They Face Significant Barriers

Product

Category 2013

Import

(Volume,

thousand

T)

2013 Import ($mil)

5Yr. Avg

Annual Import

(Volume)

Growth

%)

Import

Tariff

Rates

(%)

Key Constraints to

Market Development Market

Attractiveness for

USA

Poultry

Meat 961 2.96 -10.79 5 except

20% for

chicken

tights

MOA does not issue any

recommendation to import

poultry products including

duck and turkey since

January 2014. MOA

requires poultry that

exported to Indonesia must

be slaughtered manually

and halal

Domestic chicken

prices are high and

turkey is not

produced locally.

Chicken MDM

(Mechanical debone

meat) for

independent poultry

processing industry

is not available.

Source: GTA

V. POST CONTACT AND FURTHER INFORMATION

The Foreign Agricultural Service (FAS) of the U.S. Embassy Jakarta maintains up-to-date information

covering food and agricultural import opportunities in Indonesia and would be pleased to assist in

facilitating U.S. exports and entry into the Indonesian market. Questions or comments regarding this

report should be directed to FAS Jakarta at one of the following local or U.S. mailing addresses:

International Post: Foreign Agricultural Service

U.S. Embassy Jakarta

Sarana Jaya Building, 8th

Floor

Jl. Budi Kemuliaan I No. 1

Jakarta 10110

Tel: +62 21 3435-9161

Fax: +62 21 3435-9920

e-mail:agjakarta@fas.usda.gov

U.S. mail: Foreign Agricultural Service FAS

Unit 8200 Box 437

DPO, AP 96520-0437

For more information on exporting U.S. agricultural products to Indonesia and other countries, please

visit the Foreign Agricultural Service’s Home Page: http://usdaindonesia.org and

http://www.fas.usda.gov.

Additional related reports for Indonesia:

1. New Regulation on Animal Quarantine Measures

2. New Regulation on Alcoholic Beverage Distribution

3. Alcohol Beverages Excise Tax Update

4. FAIRS Export Certificate Report 2013

5. Exporter Guide Update 2013

6. FAIRS Country Report 2013

7. Indonesia Implements MOT Reg. No. 46 2013Issues Beef Import Permit

8. Ministries of Agriculture and Trade Revise Horticulture Import Regulation

9. The GOI’S New Regulation on Meat and Meat Products Imports

10. Revised GAIN Report ID 1345

11. Unofficial Translation of Ministry of Agriculture Decree No 4390/2013

12. Ministry of Agriculture and Trade Revised Regulations on Imported Horticulture Products

13. Ministry of Agriculture and Trade Revised Regulation on Imported Meat

14. Indonesia Extends Import Requirements on Food and Beverage Products

15. Indonesia Officially Recognize Safety Control System of United State’s Fresh Food of Plant

Origin

16. Phytosanitary Requirement for Fresh Bulb

17. U.S. Fresh Foods and Vegetables Retain Access to the Port of Jakarta

18. New Indonesian Import Duties on Alcoholic Beverages

19. Mandatory Labeling of Imported Food and Beverage Products

20. Indonesian Market Brief on Functional Beverage Ingredients

21. Processed Meat-Chicken and Fish Products Ingredient

22. Snack Food Ingredient

23. Bakery Products Ingredient

24. Market Brief-Wine

Table 14. Indonesia: Exchange Rate (Rp./1US $) on Period Month Ending Basis Yea

r Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avg 200

6 9,369 9,280 9,117 8,826 9,212 9,353 9,124 9,119 9,205 9,110 9,165 9,020 9,158 200

7 9,090 9,160 9,118 9,083 8,828 9,054 9,186 9,410 9,137 9,379 9,376 9,419 9,187 200

8 9,304 9,051 9,199 9,234 9,318 9,225 9,118 9,153 9,378 10,99

5 12,15

1 10,95

0 9,756 200

9 11,33

0 11,97

5 11,57

5 10,71

3 10,34

0 10,22

5 9,920 10,06

0 9,681 9,545 9,480 9,400 10,35

4 201

0 9,365 9,335 9,070 9,012 9,180 9,038 8,952 9,041 8,952 8,928 9,013 9,014 9,075 201

1 9,057 8,823 8,709 8,574 8,537 8,597 8,508 8,578 8,823 8,835 9,055 9,170 8,772 201

2 9,000 9,158 9,188 9,180 9,565 9,468 9,485 9,573 9,588 9,605 9,605 9,670 9,424 201

3 9,680 9,713 9,745 9,722 9,811 9,929 10,27

7 10,93

6 11,53

2 11,07

6 11,99

7 11,94

6 10,54

2 201

4 12,22

6 11,67

5 11,40

4 11,58

9 11,61

1 11,96

9 11,59

1 11,71

7 12,21

2 12,18

8 12,16

1

Source: National Statistical Agency (BPS-Badan Pusat Statistik) and Business Indonesia Daily

Newspaper